If You’re Scaling Your Business on Gut Feel, You’re Gambling

Let’s be honest—growth sounds great in a boardroom. But behind the scenes? It’s messy. Systems start creaking. Payroll gets complicated. Forecasts lose their edge. And finance teams end up holding it all together with duct tape and spreadsheets.

Matt Lescault has seen it up close—too many businesses scaling fast without the infrastructure to support it. As CEO of TydeCo™, he doesn’t talk about transformation like a buzzword. He talks about processes, data, leadership, and the real stuff that breaks when you try to grow too fast, too loosely, or with the wrong tools in place.

In this conversation, Matt lays it all out—why disconnected data kills decision-making, what HR and finance really need to fix together, and why hiring isn’t always the answer.

Matt: So I’ve talked about this a lot, I think. But there are so many nuances to it. So I don’t think this is a topic that you can ever really stop talking about.

Integrated data is all about the idea of taking disparate departments, if you want to put it that way, or your operational side of the house, and getting the information that is imperative to scalability and growth for the organization—and integrating that into the finance function.

A lot of buzzwords you hear—business intelligence (BI), big data, data analytics—all of this comes from the idea of having clean data that flows into a centralized database. Now that could be your finance ERP system. It could be a product like Power BI or Domo.

But the concept is that we have streamlined financial and statistical—or non-financial—data flowing between all departments. And your department heads, your leadership, your executive team, your board of directors (if you’re reporting to one) have that information at their fingertips at any given time.

But this is a really hard thing to accomplish, especially for small and mid-sized businesses. Even really large businesses have always struggled with maintaining clean data that is actionable and trustworthy. And what I mean by trustworthy is not that somebody is doing something nefarious. I mean that they can rely on the accuracy of that data.

And if the leaders on your team, if individuals do not trust the data they’re getting—that they’re consuming—they’re not going to actually make decisions based on that data. They’re going to make decisions based on their gut. This can work out for you sometimes, and sometimes it won’t. It’s kind of like gambling, in a way.

So the imperative to the future finance team—and the future data analytics teams; I think finance is going to evolve into more of a finance/data analytics house—is to put into place processes and systems that give a degree of confidence around the accuracy of that information.

One of the things that accounting is built on is the idea of double-entry accounting—your debits and your credits. The reason accounting was designed this way hundreds, thousands of years ago was that check and balance to the whole approach. That if one side of the ledger balanced the other side of the ledger, you had a degree of confidence that the information was accurate.

Well, this is where we’ve inherently been trained—to be that data house for accuracy. And if we can take the same principles we use in debits and credits into our entire finance and data analytics approach—of financial information, non-financial information—and deliver those reports to stakeholders, then the business is going to be that much stronger.

Matt: Well, I hope we all can admit to ourselves that our businesses pretty much lack any value without the people that are inside the business. If everybody walked away from my business today, I don’t think I’d have a business anymore.

And I know that’s a silly way to start this because we’re talking about how HR and finance play together. But HR is such an important aspect of the success of the business—and success from a financial perspective.

Every industry is different. I’ve talked about professional services. I’m not really going to go down that road. I think what I want to focus on is how people information, culture information, really interacts with—and can influence—finance and financial success within an organization.

This is not exactly your question. I will get there, Miles. I will get there. But the idea here is that if we don’t respect the value of the people side of the house as much as we respect the finance side of the house, we are going to fall off on our goals as an organization. Because the two are so interconnected.

So when we look at HR and finance, they are parallel departments. One is a lot of ways, they sit inside an operations department. Sometimes you have a Chief Financial Officer that’s overseeing operations and HR and finance. Sometimes you have a Director of Operations that sits over those offices as well. Really depends on how you’re structured.

But I don’t meet very many organizations in which there isn’t a strong play between how finance and HR operate together. And the reason that is, is that anywhere from recruiting to onboarding, onboarding to paying staff, paying staff to performance review, performance review to increases—all of these circle around those two departments.

What our job is as leaders within organizations is to create that duality within the two systems that gives our staff confidence in our respect for them, one, our willingness to invest in them from a professional development perspective, and two, to give them the information back out of the operations of the organization that show them that they’re succeeding—or where they need to develop.

And that is where the two departments meet so critically. It isn’t one or the other. It comes from both. If I’m professional services, I have utilization. If I’m SaaS, I have R&D and R&D pipeline or R&D roadmaps on how we’re getting there. Is that flowing back into the people management that I’m doing as well as the finance management?

So I don’t like to necessarily talk through the kind of simplicity side of what HR and finance does in the sense of, “Oh, we’re just going to take this employee from the HR management software and get that into the ERP. And then when they get paid, we’re going to post that.” Yeah, that’s the tactical kind of approach—the mundane piece of it.

What we really want to talk about—and what we really want clients to focus on, what we want to focus on internally—is how that entire lifecycle develops and increases the value of our teams.

Matt: So integrating payroll with finance seems like kind of a simple thought, okay? Let’s get a system that when we hire an employee, it creates that employee in the ERP system. When we pay an employee, we post that salary into the ERP system. As the employee accrues PTO, let’s get that entry into the accounting system, etc., etc., etc.

But that’s not the true value. That’s one part of it, because that can be done at the very simplest of formats, quite frankly. I can sit there and say, hey, I’m going to post my payroll in a very summary format. But how much is that giving me information back into the system?

I think everybody knows here that we are partners with Sage Intacct, and we’re deep partners with Sage Intacct. And really, it’s the number one or the only ERP that we really focus on from an implementation perspective.

But if we look at how we integrate payroll with that, not only are we bringing that information in by employee, we’re using things like dynamic allocations to allocate that across the appropriate departments, customers, jobs—so that we have full information around how we are succeeding, whether we’re hitting budgets. So not only do we have data in there from a time allocation but a cost allocation that rolls back into budget vs actual reporting that provides us the ability to look at our performance as an organization—and really, in a lot of ways, our performance as leaders.

Too many people focus on and say, “this one person is doing this,” and I would argue that a truly well-run firm is run from the top down—meaning that what we exemplify is what the managers exemplify, which is what the rest of the team exemplifies. That’s just a side note to this.

Now, when we’re talking about payroll integration, we’re talking about reporting. We’re talking about compliancy when we’re talking about labor laws, whether it’s equity information, whether it’s in the States—state allocation, nexus reporting, business registration—all of these things flow into what we’re doing.

As an example, here in the United States, if we have an employee that is in a certain state performing services and we have a customer in that state, that could create nexus. That nexus meaning that we have to register to do business and we have to file taxes in that state—not just payroll taxes, but income taxes.

Well, do we have—and does your organization have—a system that flags that as that happens and provides you actionable intel into that? Or are you sort of on your heels doing this in a retroactive mentality?

Now, I’ll be completely transparent here. In some ways, you have to be retroactive at times. It’s just almost impossible to be completely proactive. But where you can put in those processes, it really helps an organization oversee and manage this.

And when we talk about going from 20 employees to 50 employees to 100 employees to 200 employees to 400 employees—the scale of complexity actually is exponential. And so if you don’t get these types of systems in early and often—and accurate early and often—then you have a much, much bigger challenge to overcome for the organization in trying to do this.

And I’m not going to mince words here. In some aspects, we have done this to ourselves, in which we’ve gotten to a size in which it’s much harder for us to implement the processes that we want to scale—because we didn’t take the time. It wasn’t even about foresight. It was the time when it was a lot easier to get done.

Matt: Well, let’s first say that—inevitably, if you’re growing—I don’t know if you can fully bypass hiring people to help you scale. The question is, what type of people are you hiring, and where are you investing in your human capital to support that scale?

ERP systems, accounting systems, finance systems, operational systems that integrate into finance systems can absolutely reduce the amount of effort it takes—and time it takes—to manage a growth and scaling business.

What I mean by this is, if you have a CRM and that CRM is where your salespeople interact from the sales operations, and when a client signs it’s done in there, and when that client signs in there it creates a customer in your ERP—it doesn’t matter how many more customers that you have, that operation will always happen automatically.

However, if that operation is manual, and you have a human doing that—well, then you’re gonna need a second human once you get to a certain level, and a third once you get to another level. And this is where systems can help you avoid hiring what I would call tactical or non-strategic positions.

What my goal always is—whether it’s for myself or for my clients—is: how do we look at every hire as a strategic hire? That it solves something that maybe automation doesn’t, and it brings an additional value add to the organization.

So if I scale up with triple the number of customers over a year—I’m making this up, obviously—maybe I want to hire an additional business analyst or data analyst to help me segment my client data into a more informative approach that gives me information. Because maybe my growth had to do with new regions, new products, or a new methodology around sales. And now I want somebody to go in and evaluate what we’re doing. Did our strategy from an operational perspective actually pay dividends from a results side of things?

Systems can help with that. But this is where, if we go back to some of my conversations around AI—I don’t think AI is replacing positions. I think it’s re-diverting our focus on what positions are most needed and valuable to us.

I know this isn’t a conversation about AI, but there’s a correlation between the two.

So systems in general—again, finance systems, operating systems—systems in general can help reduce the need for manual labor to help you scale. But it doesn’t necessarily eliminate the need to invest in strategic positions within an organization.

Matt: I have a lot of experience trying to hire my way out of problems—and I don’t think it’s ever worked. The reason being is, sometimes when organizations are in high growth mode and people are moving really, really fast and not having the opportunity to sit down and take a step back, what they’re doing is they’re hiring to try to solve what they consider—actually, internally at times we’ve seen this—capacity shortages, without really taking a step back and finding out why we have capacity issues.

It doesn’t matter whether you’re talking about an internal department or a client-facing department or an R&D department, but: why are we having capacity or inefficiency issues?

A lot of times this has to do with process. It has to do with the fact that when you were a smaller organization—don’t care how big you are, how big you were—but you were smaller at that time, the processes you had probably worked pretty well for you. But as soon as your organization grew, those same processes, that same approach to management, that same approach to work delivery, that same approach to accountability didn’t really mature the way you thought it would have within the organization—based on the need of a more dynamic organization, more dynamic set of people.

What I mean by a more dynamic set of people is, when you start growing, you start bringing in junior-level positions to try to create training programs—where when you’re smaller, a lot of times you’re hiring more seasoned individuals into a flatter organization and giving them more autonomy to do their job.

When you get into more people, you have to create more of a process-driven approach that allows for teamwork to be successful. And so I think all of those play into the challenges that happen when you grow—and how growth can drive organizations to try to solve through just true hiring, as opposed to systems development and process development.

Matt: I’m actually going to answer this question probably in a way that you wouldn’t expect.

Let’s just talk about transparency. Who cares about whether it’s in the finance world or not the finance world?

One of the things I’ve always been proud of—myself and who I am—is my level of transparency. I like to hold my emotions in check, but on my sleeve. I like to make sure that people know the type of person I am, what values I drive through. I like to make sure that as we’re communicating, people understand the why things are.

Now, if you can drive transparency within an organization in any form or fashion, you’re going to get better buy-in from all the stakeholders. And when I talk about stakeholders, I don’t just mean your team. I don’t mean your leadership. I mean your customers, your vendors, your team—your everybody. Because the last thing people want to do is surround themselves with individuals, systems, processes, or data where they question whether things are being held back.

And nobody ever does this perfectly. We all try to balance: what is the appropriate information for somebody to consume? And what is information that is just going to be kind of static noise at the end of the day? It’s going to sit there, and it’s not really going to be meaningful. And therefore, it’s just adding to maybe confusion.

But transparency within business provides clear directives for people.

So I will bring it back to your dashboards and your financials for a second.

How does a leader of ERP know whether the organization that he’s operating is truly doing a good job if he doesn’t have transparent numbers that show exactly what is going on?

You asked whether or not I believe that data can be fully transparent. The answer is kind of convoluted—or twofold. Maybe not convoluted, but twofold. And the answer is yes, it can be completely transparent in the right way.

I’ll go back to this. Our company is built on this idea of having directors. So you have managing directors—me—an executive director, senior directors and directors. Then you have division managers and team managers. Then you have consultants and support staff around that. You have your internal side of things.

My point here is that the transparent information I provide is different for each person or each person consuming that data. And so I can be fully transparent on what I want to show that person. Not because I want to hide something—but because I want them to be focused on what their directives are.

So that’s where I think transparency is absolutely achievable. But I don’t want anybody to misrepresent what I’m saying—I don’t believe that you have to be fully transparent across all data to all people. Because if somebody is consuming data that they don’t have context around, it can actually create confusion. And the goal of transparency is to eliminate confusion.